Wednesday, April 16, 2014

An unregistered Hurricane Sandy charity ended
up actually donating a good chunk of the money that it raised—due to the
intervention of the state government.

A couple in Sparta, New Jersey adopted a
great name for a disaster relief charity—the Hurricane Sandy Relief
Foundation—and raised $334,000, but their organization was never a 501(c)(3).
All the donor-education information produced by nonprofits doesn’t necessarily
seem to have worked when it comes to preventing unregistered nonprofits from
raising huge amounts of money under the guise of disaster relief.

One of the two founders, John Sandberg, told
the Star-Ledger by e-mail that
the organization distributed over $500,000 in goods throughout the tri-state
area affected by the Hurricane. An AG’s court-appointed administrator, however,
just recently awarded four grants totaling $225,000 of the Foundation’s money
to O.C.E.A.N. in Toms River (which is building single-family homes), a food
bank in Neptune to assist in rebuilding its food pantries, the Alliance Center
for Independence in Edison for post-Sandy projects to help people with
disabilities, and a fourth group in Rockaway, N.Y., called Graybeards. The
court administrator plans to award another $100,000 soon.

According to the complaint filed by the Division of Consumer
Affairs, Sandberg and
Terraccino were no slouches. One day before the state’s emergency order and
three days before Hurricane Sandy actually hit, Sandberg registered 110
Sandy/Relief domain names including words like “Sandy,” “Relief,” “New Jersey,”
and “Fund.” (This wasn’t his first time; he did it 2011, too, registering
domain names in Hawaii after a tsunami hit the islands.) In setting up his
Hurricane Sandy website, Sandberg coded the site so that it would outrank other
similar organizations in Google searches.

This shows how easy
to convince donors to donate generously during times of emergency and disaster
even if the charity isn’t on the level. In this case, the state government was
on top of this situation within months, but that didn’t stop the group from
raising more than half a million under the guise of disaster relief. (source)

About Me

Gary Snyder is the author, most recently, of the groundbreaking expose on the charitable sector, Silence: The Impending Threat to the Charitable Sector as well as the often-cited guide on best practices and key concepts, Nonprofits: On
the Brink.

He is the publisher of a
twice-monthly newsletter, Nonprofit Imperative that gives an update on the current status of the
charitable sector.

Snyder is often quoted and frequent contributor to the blog of the National
Committee for Responsive Philanthropy. Snyder twiceauthored the Governance Chapter of the Michigan
Nonprofit Management Manual (4th and 5th editions).

He is a speaker on ethics,
financial and governance matters of the sector. For almost a decade, Snyder is frequently
consulted by Congress and has been quoted in print, broadcast and online media
outlets.